What counts as COGS for a pet products store

For measuring POAS, "cost of goods" means every cost that scales with each order you sell. Ad spend is not included, because it's the other side of the ratio. For a pet store, the cost that's easiest to leave out is the one that depends on weight: shipping.

What goes in

Cost	Count it?	Why
Product cost from the brand, distributor or manufacturer	Yes	The base of unit cost
Inbound freight	Yes	Heavy products cost more to bring in, too
Pick, pack and outbound shipping you pay	Yes	Follows weight and size, not price
Shipping boxes and protective packaging	Yes	Heavy bags need stronger packaging
Payment processing fees	Yes	A share of every order
Food and treats written off at expiry	Yes, spread across units sold	Short-dated stock becomes a cost
Damaged bags and leaking litter	Yes, spread across orders	Replacements and refunds on damaged deliveries
Autoship or subscription discounts	No, they lower revenue	Counting them as cost double-counts them
Vet partnerships, content, pet influencers	No	Marketing and overhead
Google Ads spend	No	It's what POAS divides by

Building one order's cost

That comparison is the core of pet POAS. Order value and margin can move in opposite directions once shipping is counted, which is why a single store-wide margin misleads.

Three levels of accuracy

Selvra OS works with three tiers of cost data and shows which one a figure is based on.

T1: one flat margin (labelled "estimated")

One percentage for the whole catalogue. This only works for a store that sells one kind of product, like a treats-only brand. For a store selling food, litter and toys, a flat figure is wrong for almost every order.

T2: margin by category (labelled "approximate")

A margin per product type: dry food, wet food, treats, litter, toys, beds and accessories, health products. For pet stores this is where the accuracy starts to pay off, because the categories differ in weight as much as in price.

T3: cost per product (labelled "verified" once synced)

Shopify's Cost per item field, per variant, read directly. Bag sizes are variants with very different costs, so each needs its own cost. Shipping isn't part of Cost per item, so account for it separately by weight.

Reading the benchmark above

The figure above is one listed company: Chewy's cost of goods was 70.2% of net sales in fiscal 2025. Chewy sells other brands' products as well as its own, and consumables made up $8.8 billion of its $12.6 billion in net sales. A brand selling only its own products buys at a different point in the chain, so this is a reference point for a retailer's cost structure, not a target for yours.

Common COGS mistakes in pet stores

• Leaving shipping out. On heavy products it can be the second-largest cost per order.
• Using one margin for food and toys. Weight makes their real margins very different.
• Counting subscription discounts as cost. They reduce revenue; record them there.